In CT visit, Boston Fed President Collins backs rate hike, sees possible further increase

Hartford Business Journal – Wednesday, September 23, 2026
By Greg Bordonaro

Federal Reserve Bank of Boston President and CEO Susan Collins said Tuesday she supported last week’s interest rate increase and included a possible further hike in her latest economic projections, citing disappointing progress on inflation and a firmer national labor market.

In an exclusive interview with the Hartford Business Journal during a visit to Connecticut, Collins said her projections also contemplated keeping monetary policy restrictive, potentially through next year. But she stressed that those projections reflected her assessment last week and that future decisions will depend on incoming economic data.

The Fed raised its benchmark interest rate by a quarter of a percentage point on Sept. 16, bringing the target range to 3.75% to 4%.

“Given what I saw as increased risks that inflation might remain elevated for longer, I saw it as appropriate to increase rates and have a policy stance that is a bit more restrictive,” she said.

Collins said tariffs, higher energy costs and increased demand tied to artificial intelligence investment have added to inflationary pressures. Still, she sees a path for productivity gains to help bring inflation down without much additional monetary tightening, assuming tariffs and energy costs do not rise again.

Collins, who has been Boston Fed president since July 2022, was in Connecticut to meet with labor, healthcare and childcare leaders, gathering firsthand accounts of economic conditions to inform her work at the Fed. She spoke with HBJ at the Connecticut AFL-CIO headquarters in Rocky Hill.

As Boston Fed president, Collins helps shape national interest rate policy and brings New England’s economic conditions into the Federal Reserve’s deliberations.

She said her visit highlighted financial pressures facing workers and families. Housing costs surfaced in every meeting, she said, alongside concerns about food and childcare costs and people needing multiple jobs to cover their expenses.
Uneven job market

Connecticut’s job growth over the past year has outpaced both New England and the nation, Collins said, even as the state’s unemployment rate has risen.

State Department of Labor figures show Connecticut’s payroll employment grew 0.9% over the year ending in August, compared with 0.4% nationally. Although the state lost 300 jobs in August as government employment declined, private-sector employment reached a record high.

Connecticut’s unemployment rate fell to 5.1% in August from 5.2% in July, but remained higher than a year earlier. The state’s labor force — the number of people working or actively seeking work — also declined by 4,100 in August. Over the past year, the state’s labor force has shrunk by 2.8%, or 54,400 people, DOL data shows.

State labor officials have said the increase in the unemployment rate over the past year largely reflected people entering the job market rather than layoffs.

Nationally, unemployment has edged down over the past six months and remained in the low 4% range for roughly two years, Collins said. She described overall labor supply and demand as roughly balanced, although national figures mask differences among industries and communities.

Collins suggested that people taking second and third jobs could help explain Connecticut’s payroll gains despite rising unemployment. She also noted that employment and unemployment figures come from different data sources.

“There’s more to do to unpack that,” she said.

Her meetings in Connecticut also highlighted differences among industries and workers. Union leaders told her construction jobs were relatively plentiful, while healthcare and skilled trades employers continue to struggle to fill positions, she said. Some workers, meanwhile, are having difficulty finding jobs that pay the wages they’re seeking.
Aging workforce

New England, including Connecticut, is aging faster than the nation as a whole, Collins said, with retirements creating challenges for employers seeking new workers. She cautioned that relatively low layoffs do not necessarily translate into plentiful job opportunities.

During her visit, Collins said she heard about apprenticeships and other pathways into healthcare and skilled trades. She also cited workforce partnerships she had explored on earlier Connecticut visits, including connections among Electric Boat, other employers, community colleges and high schools.

“One of the things I heard a lot about was creativity, passion and finding ways for people to work together to help solve problems,” she said.

Collins said manufacturing was among the sectors contributing to Connecticut’s job growth.

On earlier trips to Connecticut and elsewhere in New England, she heard about efforts to improve efficiency and use technology to address hiring difficulties in manufacturing. More broadly, productivity gains help explain how economic output can grow alongside relatively slow increases in employment, she said.

Collins said her visits to Connecticut and other New England states complement official statistics by providing a more immediate view of economic conditions and insight into how people are planning for the future.

At every meeting of the Federal Open Market Committee, which sets interest rate policy, she shares observations from her New England contacts and compares them with what colleagues are hearing elsewhere.

The Boston Fed is also seeking more Connecticut participants for surveys that inform the Beige Book, the Federal Reserve’s regular collection of regional economic reports.

“Connecticut’s been underrepresented,” she said.

Asked about the Fed’s 2% inflation target, Collins reaffirmed that commitment. She described the goal as keeping inflation low and stable so people can focus on other aspects of their lives and the economy.

“We clearly do not have price stability,” she said.

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